Author | Liao Yifan reports | New Retail Reference
BESTORE is no longer beautiful
The first half of 2024 has passed, and the casual snack field is not as casual as the name suggests.
High-end snack brands are pursuing transformation, emerging mass snack stores are rising rapidly, and the battlefield of the snack industry can be described as full of gunsmoke.
Some people are happy and some are worried, and the old snack companies that have embarked on the road of transformation are in different situations.
The three squirrels have achieved outstanding results and are expected to make a lot of money in the first half of the year, achieving a double harvest of revenue and profit.
The net profit growth rate of Yanjin Shop, which adheres to the diversification strategy, has gradually slowed down, but the growth momentum has not changed.
However, BESTORE, which was once respected as one of the "Big Three Snacks", failed to deliver good news.
Due to the large-scale price reduction strategy previously implemented, BESTORE unfortunately fell into the predicament of a sharp decline in performance, and its net profit plunged sharply.
After half a year in the casual snack industry, BESTORE still failed to keep up with the speed of other brands.
Back in 2021, it was the 15th anniversary of the establishment of BESTORE, and the senior management of BESTORE at that time was full of confidence and expected BESTORE to become an aircraft carrier in the snack category.
However, to everyone's surprise, on the way to becoming an "aircraft carrier", BESTORE will go more and more difficult.
After hitting a trough of nearly three years in 2023, BESTORE learned from the pain and implemented the largest price reduction in 17 years at the end of 2023, stumbling into 2024.
Unfortunately, the performance in 2024 has not recovered significantly.
According to the 2024 semi-annual performance forecast released by BESTORE, BESTORE may show the lowest semi-annual performance level since its listing in terms of net profit and non-net profit, two key financial indicators.
In other words, in this year's mid-term performance appraisal, BESTORE failed the test.
In terms of specific data, in the first half of 2024, BESTORE is expected to have a net profit attributable to shareholders of listed companies of 21 million yuan to 30 million yuan, a year-on-year decrease of 84.15% to 88.91%.
The net profit after deducting non-profits was 7 million yuan to 16 million yuan, a year-on-year decrease of 87.07% to 94.34%.
Source: BESTORE's 2024 semi-annual performance forecast
Obviously, BESTORE still has a net profit of 62.4828 million yuan in the first quarter, but it is expected that the net profit of BESTORE in the first half of this year will be at most 30 million yuan.
To put it simply, BESTORE was in a loss in the second quarter, which was the first quarterly loss suffered by BESTORE since its listing.
Self-depreciation, vitality is greatly damaged
In the face of the strong "kicking hall" of the emerging mass merchandiser snack store with low prices, several "old guns" in the snack industry had to fight.
However, the road to cost-effectiveness for high-end snack brands is not as easy as imagined.
New Retail Reference learned from the financial report data released by BESTORE that its revenue growth trend showed obvious fluctuations.
Between 2020 and 2023, BESTORE's revenue growth has experienced a significant process of climbing and then falling.
In 2021, BESTORE was in full swing, with a revenue growth rate of 18.11%, and just two years later, the revenue growth rate of BESTORE in 2023 dropped to -14.76%.
It is not difficult to see that the company's revenue will suffer the first decline since public data is available in 2023.
In terms of net profit, there is a similar "heaven to hell" situation.
After reaching a profit peak of 344 million yuan in 2020, BESTORE's net profit began to decline year by year, and has shrunk to 180 million yuan in 2023, a sharp decline of 46.26% year-on-year.
Even more frightening than the almost halved net profit is the shrinkage of non-net profit.
Intuitive data shows that BESTORE's non-net profit will drop by 69% in 2023.
At the same time, the mass-merchandised snack stores that have seized the snack market are thriving.
Mingming, a wholesale snack group, was very busy, breaking through 10,000 stores in June this year, and is still expanding at an accelerated pace.
There is no doubt that "low price + sinking" is the magic weapon for this kind of mass snack store.
Their strategy is also very simple: low commodity prices, many categories, through small profits and quick turnover, to kill the "high" peers.
Source: BESTORE's official Weibo
With the company's dismal revenue statement on one side and its wolf-like peers on the other, BESTORE was finally forced to Liangshan at the end of 2023.
In November 2023, BESTORE, which was once listed as the "No. 1 stock of high-end snacks", announced that it would reduce its price for no other purpose than to survive in the highly competitive market.
This large-scale price reduction in 17 years has reduced the price of BESTORE's 300 products by an average of 22%, with a maximum reduction of 45%, mainly focusing on snacks with cost optimization but no impact on quality and high repurchase rate.
Obviously, it is not as easy as imagined to change the track, in the process of turning from the high-end route to the people-friendly route, BESTORE bumped all the way, and the price war that took the initiative to join did not save the declining performance, but made BESTORE lose its vitality.
From the perspective of new retail reference, the reason behind BESTORE's "800 injuries to the enemy and 1,000 self-losses" is very simple: price reduction directly affects product profits, which is a process that BESTORE must go through in the painful period of transformation.
How does BESTORE save itself?
Why was the former snack giant abandoned by the market?
In the final analysis, BESTORE has not kept up with the changing market rhythm.
In order to continue to stay at the table of casual snacks, BESTORE urgently needs to rearrange its cards.
Source: BESTORE's official Weibo
New retail reference believes that in the face of fierce competition in the market, running behind the wave of transformation set off by peers is not the way out, and if we want to break the deadlock, BESTORE must take the initiative to roll in.
"High-end" is the foundation of the start, "cost-effective" is the key to success, BESTORE should create the advantages of "high-end cost-effective", and carry out involution in four aspects:
The first is supply chain involution. From the source of production, we will focus on reducing costs, strictly selecting suppliers while paying attention to management and control, avoiding food safety problems, and not ruining a good reputation in order to reduce costs when pursuing low prices.
The second is product involution. On the one hand, it is necessary to actively carry out product innovation, increase the snack categories of BESTORE, provide customers with more choices, and allow consumers to "one-stop shopping" in BESTORE.
On the other hand, it is necessary to strengthen the original characteristic products and pursue the irreplaceability of star products.
Again, it's employee involution. Improve the treatment of employees, adjust the internal salary structure, implement the incentive mechanism, and effectively improve the enthusiasm of employees.
Finally, there is channel involution. At present, in the field of snack food, e-commerce live broadcast has invaded strongly, and offline entities still occupy a large proportion, and omni-channel development is a must-answer question for snack companies in the current market environment.
For BESTORE, on the one hand, it is necessary to continue to consolidate offline physical stores and improve the service experience of users in an all-round way; On the other hand, it is also necessary to grasp the trend of new channels and do a good job in the layout of online e-commerce such as Douyin live broadcast and group buying.
The road is long and the line is coming.
It is indeed difficult to adjust the business strategy, but as a pioneer in the industry, the brand awareness and market share accumulated by BESTORE over the years still exist, and if we insist on deep cultivation, we may finally usher in the day when we see the dawn.